It's been a long time since there was much to cheer about at Inside Value selection Coca-Cola (NYSE:KO), but having just gone through the company's second-quarter results, I think it is safe to say that things look better now than they did a year or two ago.

It wasn't a perfect quarter for Coke; in fact, there are a number of areas where the company has some work to do. That said, Coke delivered pretty solid growth and still has a very strong balance sheet. The high-level financial performance is outlined in today's Fool by Numbers, so I will focus on some of the details and some items from the company's conference call.

The biggest thing investors will note is that the company beat estimates by $0.02 per share. However, there are a couple of moving parts in the quarter beyond the $0.04 per share that were included in the company's reported $0.78 per share of earnings. The first item is a $0.02 benefit to operating earnings, caused by the timing of gallon sales, which the company expects will reverse in the second half of the year. The other item is currency fluctuations, which were less of an impact than the company expected, and Coke is now forecasting a smaller impact for the remainder of the year.

Across the entire business, Coke showed 3% growth in carbonated beverages and 5% in noncarbonated. On the conference call, CEO Neville Isdell noted the 3% growth in Coke products and that Sprite was up 9% internationally and 5% worldwide. The company also showed double-digit growth in water, juice, and Powerade. This is a bit different from the results Pepsico (NYSE:PEP) posted last week. Pepsico saw strong growth in non-carbonated beverages, but a lackluster performance in carbonated beverages. Non-carbonated is certainly where the growth is, but there is something to be said for maintaining the more mature carbonated business as well.

International markets were on target or strong, with the exception of India, the Philippines, and Japan. In India the company is tightening its operations and collecting on receivables, and in the Philippines the problems are structural and will take more time to resolve. The trouble in Japan is due to numerous factors and some poor performance from tea and coffee products. Having lived in Japan, I would chalk that up to competition from Suntory, Starbucks (NASDAQ:SBUX), Kirin, Asahi, and some smaller competitors in the ready-to-drink tea and coffee businesses. It is a constant battle to stay ahead of these competitors in the non-carbonated side of the business, but the company sounded confident that actions they are taking will lead to gradual improvement in the second half of the year.

Coke is also making progress in the energy-drink business and mentioned in the conference call that it is close to being No. 2 in that market segment. Considering all the hoopla that surrounds Hansen Natural (NASDAQ:HANS) -- and the meteoric rise in that company's sales, P/E, and share price -- I think there is reason for investors that hold the stock to reevaluate its potential against its valuation.

Overall, I think the company's results are solid, despite the weakness in Japan, India, and the Philippines. A back-of-the-envelope valuation, however, is not as attractive. I find Coca-Cola reasonably valued, and like the 2.9% dividend yield, but the company needs to deliver around 6%-8% growth in free cash flow (or owner earnings, if you prefer) for five to ten years to justify the current price. That rate of growth strikes me as reasonable, but doesn't leave a large margin of safety. If Coke's consistency and strong brands are something you really wish to own, I think building up a position gradually makes the most sense.

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At the time of publication Nathan Parmelee owns shares of Starbucks but has no financial interest in any of the other companies mentioned. The Motley Fool has an ironclad disclosure policy.